The effect of donors' policy coherence on growth

Aurore Gary () and Mathilde Maurel
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Aurore Gary: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

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Abstract: The literature has shown that aid and trade or aid and migration are not independent from each other: aid can be provided for relaxing migration pressures or donors can tie aid in order to increase their exports to developing countries. This finding can be generalized to other donors' policies: investment, technology, environment, security policies and it must be incorporated in the way aid effectiveness is assessed. The effect of aid can be dampened of enhanced, depending on whether aid is a substitute or a complement for other policies. In other words, donors should be consistent to be efficient. Taking advantage of CGD indices, this paper estimate growth equations by controlling for consistency. We estimate a robust and significant positive effect of donors' policy coherence from 22 DAC donors on the economic growth in developing countries. A one standard deviation increase in consistency changes results in an increase in economic growth in developing countries of 14%.

Keywords: Development aid; complementarity; economic growth; Aide au développement; cohérence; croissance économique (search for similar items in EconPapers)
Date: 2013-05
New Economics Papers: this item is included in nep-dev and nep-gro
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Published in 2013

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Related works:
Working Paper: The effect of donors' policy coherence on growth (2013)
Working Paper: The effect of donors' policy coherence on growth (2013)
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